Will Substitute Agreement

July 23, 2018

A Will Substitute Agreement delivers flexibility in retaining assets outside of a trust, while avoiding probate upon death. Such an agreement offers the convenience of owning real estate in one’s own name, with the confidence that this real estate will go to your trust upon death without probate. Additional property can be distributed or sold without court involvement, even if additional real estate is purchased or sold during lifetime.

Funding a Revocable Trust with a Will Substitute Agreement

In Wisconsin certain “probate assets” and Wisconsin real estate can be funded to a revocable trust after death without probate. In fact, Wisconsin is one of the few states where will substitute agreements are allowed.

Give Yourself Peace of Mind

A properly crafted estate plan can give you peace of mind, knowing your assets and family are well protected. Our estate planning lawyers will help you get there.

Also called a non-probate marital property agreement, a will substitute agreement can transfer property to a trust without probate, upon death.

We should highlight that only married couples in Wisconsin can use this document.

Avoid Probate with a Non-Probate Marital Property Agreement

Via the Marital Property Act, Wisconsin introduced the ability to transfer assets without probate through the use of a marital property agreement. A versatile estate planning tool, we typically limit the use to distribution between spouses at death and funding a revocable trust at death, for reasons beyond the scope of this article.

Will Substitute Agreement: A Powerful Estate Planning Document

A non-probate marital property agreement is an important part of almost every trust plan we create for spouses. Even if the trust estate plan calls for transferring all relevant probate assets to the trust pre-death, having a non-probate marital property agreement is still essential to avoid probate at death. This approach compensates for changes in assets or mistakes in re-titling assets to the trust. This is a great way to ensure married couples in Wisconsin avoid probate.

Wisconsin Real Estate: Convenience and Probate Avoidance

Through a will substitute agreement, married couples with trusts can leave their Wisconsin real property in both or one of their names without transferring it to trust – and still avoid probate. This allows for the convenience of owning Wisconsin real estate in personal names, easy refinancing, and sales without trust involvement during lifetime.

Many attorneys incorrectly believe that Wisconsin real property must be placed in trust during lifetime to avoid probate at death. Or, they wrongly believe that Wisconsin real estate must have a transfer on death deed associated with it to avoid probate.

However, this short-sighted approach proves inconvenient if the property is sold, refinanced, or mortgaged during lifetime. If the property is legally owned by the trust, it may need to be removed from the trust. Or it may present other issues with trust ownership.

No Substitute for Trust Planning and Asset Coordination

Use of this probate avoidance agreement cannot replace a diligent review and coordination of all assets with your estate plan. It is still necessary to make sure that all of your assets are considered in order to deliver the intended result upon death.

Certain assets may need beneficiary updates to best coordinate with the estate plan and trust. For example, making sure that retirement assets, life insurance, and certain investment or bank accounts have properly designated beneficiaries, if suggested, is crucial to a well-coordinated estate plan.

Transfer to trust of other assets maybe recommended to ease post-death trust administration time and expense, such as large bank accounts. As one example, if a child’s share is to be held in trust, it’s unwise to name the child directly as a beneficiary on life insurance. Instead, we would name the trust as beneficiary so that these funds get into the child’s trust at death.

Non-Wisconsin Real Estate

Non-Wisconsin real property normally should be transferred to the trust as part of the estate planning process. The non-probate marital property agreement will not be effective in funding non-Wisconsin real estate into a trust post death. Thus, the coordination of non-Wisconsin real property with your trust plan is required to avoid probate in another state.

This article is intended as general legal information and not as legal advice to any particular client, nor is it intended as advice on any particular issue or matter. If you have any questions regarding the subject matter of this article, or wish to discuss how the subject matter of this article may apply to your situation, please contact us.

Wokwicz Law Offices, LLC, located in Kenosha, Wisconsin, serves clients throughout Kenosha County and Racine County, including Racine, Somers, Pleasant Prairie, Salem, Caledonia, Lake Geneva, and Paddock Lake.